In October of this year, the Council of Ministers adopted the Bill on amendments to the Act on Agricultural Tax, the Act on Local Taxes and Fees, and the Act on Stamp Duty, which was presented by the Minister of Finance.
The proposed regulations are set to come into force on January 1, 2025.
On October 15 of this year, the government’s Bill was sent to the Polish Parliament for further proceedings (print no. 741).
The most significant proposed changes related to property tax include:
- unification of taxation rules for garages in residential buildings: all premises in residential buildings intended for vehicle storage (not used for business activities) will be taxed like apartments.
- clarification of the definitions of buildings and structures for property tax purposes: the absence of references to building law in the definitions of buildings and structures will ensure greater legal certainty in property tax law, which will no longer be directly influenced by changes in building law.
- a closed list of taxable structures: the proposed regulations include a closed list of structures subject to property tax, as well as a narrowed list of taxable construction devices, limited to those directly related to a building or structure and essential for its intended use.
- According to the draft small architectural objects will remain exempt from property tax.
- The draft introduces also extension of the deadline for property tax declarations for entrepreneurs: entrepreneurs will be allowed to submit their property tax declarations for 2025 by march 31, 2025, after fulfilling specific conditions outlined by law, to give time to adapt to the proposed changes.
According to the planned regulations, a “building” is to be defined as a structure within the meaning of property tax regulations erected as a result of construction works, with installations ensuring its intended use, permanently connected to the ground, separated from the space by building partitions, and equipped with foundations and a roof, excluding however, objects used to store loose materials, pieces of materials, or materials in liquid or gas form, with capacity as their primary technical characteristic, which will definitely benefit taxpayers, excluding from this definition objects built in a place other than their final location, e.g. containers, gatehouses or kiosks, as well as silos, elevators or bunkers used for storing grain, fuels, gases or chemical products.
The amendment is also intended to introduce a new definition of a “structure”, understood as:
- a non-building structure listed in Annex No. 4 to the Bill, together with installations ensuring its usability according to its intended purpose (i.e., for example: raw water tank, technological hall, treated water retention tank, backwash water settling tank – forming part of a water treatment plant; container-type structure permanently fixed to the ground, pole base for a cable line, foundation, supporting structure, free-standing antenna mast, free-standing tower, telecommunications cabinet, telecommunications post – forming part of a telecommunications network; road, entrance, exit and driveway, parking bay, fence, waste disposal site, truck scale, railway scale, tent cover, pneumatic shell, shooting range, street kiosk, street sales pavilion, exhibition pavilion – permanently fixed to the ground);
- wind power plant, nuclear power plant, photovoltaic power plant, agricultural biogas plant, energy storage facility, boiler, industrial furnace, cable railway, ski lift, and ski jump – in the parts that are not buildings, solely in regard to their structural (construction-related) components;
- construction equipment – including connections and installation devices, particularly those used for wastewater treatment or collection, and other technical devices directly associated with the building or structure mentioned above, necessary for their use in accordance with their intended purpose;
- technical devices other than those listed above – solely in regard to their structural (construction-related) components;
- foundations for machinery and technical devices, as technically distinct parts of objects forming a functional whole, constructed as a result of building works, even if they form part of a structure not listed in the act.
The Draft also provides for the introduction of a definition of “permanent connection to the ground,” meaning a connection that ensures the stability of the structure and its resistance to external factors that could destroy, displace, or move the object.
Under the proposed Article 6 of the amendment, legal entities and organizational units (such as the National Center for Support of Agriculture and State Forests) will be able to extend the deadline for submitting their property tax declarations for 2025 until March 31, 2025. This will certainly be beneficial for taxpayers given the short time frame for adapting to these proposed changes.
To take advantage of this option, these entities must:
- submit a written notification to the competent tax authority by 31 January 2025 regarding the exercise of this right. The notification must include the name of the tax authority to which it is addressed, the name of the taxpayer submitting the notification, the address of the taxpayer’s registered office, the taxpayer’s tax identification number, and a declaration of exercising the right to submit a real estate tax return for the year 2025 by 31 March 2025;
- without being summoned by the tax authority, pay monthly instalments of real estate tax into the bank account of the relevant municipality as follows:
– for January: by 31 January 2025,
– for February: by 15 February 2025,
– for March: by 15 March 2025,
in amounts corresponding to the average monthly amount of tax due for the year 2024; - if the above instalments are lower than the real estate tax instalments resulting from the submitted tax return for 2025 for the respective months, the outstanding amount of tax must be paid, without summons, into the account of the relevant municipality by 31 March 2025. (The amount paid by this deadline is not considered tax arrears within the meaning of the Tax Ordinance Act of 29 August 1997. Conversely, if the paid instalments exceed the amounts due under the submitted return for the respective months, the resulting difference is not considered an overpayment under the same Act; however, the provisions of Article 76 of the Tax Ordinance shall apply accordingly with regard to its allocation or refund.).
These proposed amendments in the Local Taxes and Charges Act will require taxpayers to take various actions, especially regarding property audits and updating the property tax amounts based on previously filed declarations.